November 30, 2017

(Washington, D.C.) — The Pharmaceutical Care Management Association (PCMA) released the following statement on a new report from the Pharmaceutical Research and Manufacturers of America (PhRMA):

“While this latest drugmaker lobby report acknowledges ‘rapid growth in publicly reported list prices,’ it tries to blame everyone else for the problem – except those who actually set the prices. The most direct way for drugmakers to reduce costs and improve access is to simply cut their own prices.

Drugmakers set and raise prices unrelated to the rebates they negotiate with pharmacy benefit managers (PBMs). Many high-priced drugs like Sovaldi, which initially cost $84,000, involved no rebates at all.  Likewise, many lower-priced drugs that face significant competition involve higher rebates.  The obvious reality is every manufacturer of every product uses a supply chain to bring their goods to market. This doesn’t change the fact that manufacturers alone set list prices for their products.

In fact, the report conflicts with previous statements from the drugmaker lobby that plans routinely share discounts and rebates to reduce premiums, deductibles and cost-sharing on prescription drugs.

PBMs are hired by America’s largest, most sophisticated health purchasers, employers, unions and government programs to reduce costs by, among other things, promoting generics and negotiating price concessions on brand-name drugs, almost all of which are passed-through to plan sponsors to reduce premiums, out-of-pocket costs and other expenses. Many health purchasers require PBMs to pass-through 100 percent of rebates.

According to CMS, requiring plans to estimate and apply manufacturer rebates at the point-of-sale would raise premiums by up to $28 billion and taxpayer costs by up to $82 billion over the next decade. Such a requirement would also create a windfall for drugmakers, who would pay up to $29 billion less in donut-hole discounts.”

As the Administration and Congress explore ways to improve the health care system, PCMA’s DrugBenefitSolutions campaign explains how PBMs reduce costs for public and private programs. The campaign includes videos on how prescription drug pricing works and how rebates and other discounts reduce costs for consumers and payers.